NAIROBI, Kenya, Jun 14 – The cash crisis facing the government has forced the devolved units to focus on recurrent expenditure with minimal spending on development projects.
With the delays in the disbursement of the equitable share across the 47 counties, the county bosses have focused on paying salaries to avoid stifling operations in counties.
In the third-quarter report released by Controller of Budget (COB) Margret Nyakang’o on Wednesday only 12 percent of the budget released to counties between July 2022 to March 2023 was used to finance development projects.
In the figures released, in the Sh239.67 billion released to counties, only Sh29.73 billion was spent on bankrolling development projects.
The aggregate development expenditure allocation requires that at least 30 percent of the budget be allocated for development programs.
The huge chunk of Sh135.85 billion (56.7 percent) was channeled to pay salaries while Sh74.09 (30.9 percent) billion was used on operations and maintenance.
“When you have limited incomes, there is certain things that you need to prioritize.When revenues are limited, you would rather go for the most urgent and here we are talking about salaries. When cash flows are limited, development suffers,” Nyakang’o said.
Nyakang’o mentioned that the situation of low spending when it comes to budget allocation might be worsened due to shrinking revenue.
“As the year progress if revenue does not come in, they (Counties) prioritises salaries and that is why we end up with low development,” she said.
In the data released, Lamu County ranked the lowest with (Sh2.15 billion), Tharaka Nithi (Sh2.79 billion) and Embu county (Sh2.89 billion)
Nairobi City (Sh17.32 billion), Turkana (Sh10.04 billion), Kiambu (Sh8.83 billion) emerged the biggest spenders according to CoB analysis.
Since the inception of the Kenya Kwanza Administration, counties have been facing delays in the disbursement of the equitable share.
The National Treasury is yet to disburse the equitable share for the month of April and May as the financial year draws to a close.
“Treasury could be willing to give the money but when revenue does not meet the desired levels then they can only release what is available,” the COB said.
County governments have also precipitated to the reduced development funding due to their own underperforming revenue collection.
Records show that counties have been hitting below the belt when it comes to own-sourced revenue collection exposing them to be dependent to the equitable revenue share.
“We have issue with the own-source revenue, they (counties) are barely scratching the surface,” said Nyakango.
Kwale, Embu, Kisumu, Kakamega, Taita-Taveta, Tharaka-Nithi, Busia, Nairobi City, Garissa, Tana River, Nandi and Mandera counties are among the 22 counties that have underperformed in revenue targets.
Others are Wajir, Makueni, Homa Bay, Kisii, Kajiado, Nakuru, Murang’a, Kericho, Vihiga, and Nyamira counties.
